Japan Isn't Bailing Out Banks, It's Just Helping Them
Your article "Japan's battered banks need bigger bailouts" (Finance, Aug. 8) is misleading, since you do not distinguish between the problems of individual banks and the risks to the banking system as a whole. It is simply not true that the Japanese banking system is about to collapse without a wholesale bailout by the government.
The $26 billion of real estate purchases you mention do not represent a bailout for the banks. There are other measures included in that package that are meant to speed up the write-offs and the provisioning against bad loans. The scheme was also devised to help the banks cope with the restructured loans. You could ask people in other industries whether they think banks cannot lend enough money due to a cash shortage stemming from the bad-loan problem.
Office of International
Research & Cooperation
Institute of Fiscal & Monetary Policy